A Small Business Owner's Guide to Employment Law & Wages
With the huge amount of informative resources available today, more and more people are deciding to start up new businesses. The recession has certainly played a part in this phenomenon - many workers who have been made redundant see running their own business as a fresh start in their careers.
However, switching roles from employee to employer brings many complications, so thought and consideration is required as to how to go about employing staff in the proper manner. Should you decide to take the plunge and start a new business, you must have an appropriate understanding of employment law in order to staff your new venture efficiently.
Upon hiring, a contract of employment between yourself and your new employee should be produced, detailing the rights, duties and obligations of both parties. Although deemed by some not to be completely necessary, such a contract serves to protect both yourself and your employee, as well as possibly offering benefits to both sides. It should be drawn up once there has been offer and acceptance in terms of pay, duties etc., which are enforceable in nature.
Within the employment contract, there are some basic elements that must be present. It must outline your obligation as an employer to provide work, and the employee's obligation to carry it out and offer their services personally. The employee must also agree that you are to have some amount of control and direction over their work. These terms may be negotiable to a degree, but must be present along with more specific information regarding pay, hours, behaviour and so on.
Of course, as much ground as possible should be covered within the contract in order to avoid future conflicts. It's usually a good idea to discuss areas such as holiday entitlement and maternity/paternity leave at this point to ensure that they are agreed upon amicably. Employment rights disputes can often become very intense and you may easily find yourself in court if you don't protect yourself.
Make sure that you outline the UK statutory dismissal and disciplinary action procedures to employees from the start, as unfair dismissal charges or allegations can damage your business. Discrimination is a very serious issue in today's business world, so care must be taken to avoid any action that may be perceived to be born out of prejudice. Follow the procedures written into the contract to the letter and avoid a "this is my business, I do as I please" attitude at all costs.
In terms of pay, there are again statutory laws and guidelines in place to protect both you and your employee. UK employment law states that employees are entitled to work a maximum of 48 hours a week, however they may work more hours if available, should they voluntarily choose to. It is illegal to put pressure on an employee to overstep the 48 hour mark, or give them any indication that working extra hours will lead to promotion or favourable treatment.
Furthermore, it is your responsibility as an employer to offer at least the national minimum wage, which varies depending on ages but currently stands at £6.08 per hour for adults over the age of 21. You must also deduct tax and national insurance contributions from your employee's pay and outline this on their pay slips, as well as offer sufficient holiday time, whether the employee in question works full time or part time.
Written by James Sheehan, a passionate blogger with past legal experience